They surrender ownership of anything they put in the fund but retain advisory privileges over how their account is invested, and how it distributes money to charities.
[1] Donor-advised funds provide a flexible way for donors to pass money through to charities—an alternative to direct giving or creating a private foundation.
Donors enjoy administrative convenience (the sponsoring organization does the paperwork after the initial donation), cost savings (a foundation requires around 2.5% to 4% of its assets each year to run), and tax advantages (versus individual giving) by conducting their grantmaking through the fund.
In addition, the founders or board of a private foundation have complete control over where its giving goes within broad legal bounds.
Further, donors avoid the cost of establishing and administering a private foundation, including staffing and legal fees.
The simultaneous growth of DAFs[7] and online giving[8] has led to funds like CharityBox,[9][non-primary source needed] that are run by start-up companies through a web/mobile platform.